Legislators ready to think about jobs with every new bill
State legislators, who spent much of the past campaign pledging to make job growth a top priority, now have to decide how often they want to be reminded of that.
The legislature’s nonpartisan Office of Fiscal Analysis, which analyzes every bill to determine its potential cost to state government, recently filed a plan outlining how it could take a similar look at possible impacts on public- and private-sector jobs.
“Frankly, I think we’re stumbling around in the dark as a legislature in terms of how what we do impacts the business community and jobs in particular,” said Rep. Sean J. Williams of Watertown, ranking House Republican on the tax-writing Finance, Revenue and Bonding Committee.
“I generally think it’s a good thing,” said Sen. Gary D. LeBeau, D-East Hartford, co-chairman of the Commerce Committee. “This is going to be a pro-business session.”
After watching Connecticut lose more than 100,000 jobs in the recent recession, the General Assembly adopted legislation last spring directing its nonpartisan fiscal staff to plan an expansion of its role, and determine how much added funding would be needed.
Created in 1973, OFA now prepares fiscal notes on as many as 900 pieces of legislation annually.
The office issued a report last month estimating that it would need an extra $152,100 in continuing costs to cover salaries for two additional analysts, and a one-time, $123,000 expense to purchase economic modeling software from Regional Economic Models Inc., of Amherst, Mass.
Sen. Eileen Daily, D-Westbrook, co-chairwoman of the Finance committee, said this expense is small in the context of this year’s $19.01 billion total state budget. “If we could use this information skillfully it could turn out to be a very cost-effective thing to do.”
But the state’s chief business lobby, the Connecticut Business and Industry Association, warned Wednesday that the idea of attaching job impact statements to all legislation could be problematic.
“I don’t think one analysis, one statement, can be reflective of the true impact a bill might have when it comes to jobs,” Bonnie Stewart, the association’s tax policy specialist, said. “It’s just too complex.”
For example, Stewart said, various economic models can project the “multiplier effect,” or the impact one change in an economic variable — such as a new tax credit — could have on an immediate need for new jobs. But the impacts off such changes on research and development decisions, other business investment, importing and exporting policies and other trends are difficult to boil down to a brief impact statement.
“It could end up doing more harm than good,” Stewart added.
LeBeau also conceded that there could be problems, particularly if lawmakers exaggerate the importance of such statements.
He noted that while the office’s fiscal notes typically provide an accurate assessment of immediate revenue and expenditure gains and losses directly tied to legislative action, the impact of bills just a few years after their adoption often is difficult to project.
Daily voiced a similar concern, noting that a new requirement that the legislature reassess estimates tied to key fiscal bills five years after their enactment could be making analysts reluctant to make any assessment in more cases.
OFA notified lawmakers last spring last spring that it lacked sufficient data to assess a controversial tax proposed on windfall profits earned by major electricity generators.
Rep. Vickie Nardello, D-Prospect, co-chairwoman of the Energy and Technology Committee, said she believed the tax would raise as much as $300 million annually, but nonpartisan analysts said they lacked the data to issue any projection.
Still, both Daily and LeBeau said they believe there is a good chance the legislature would approve the use of job impact assessments later this legislative session.
“I think most people look at this as a pro-business move and that it’s information they would want to have,” LeBeau said.
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